3.1　FengJie accepts liability only in case of negligence proven by the Principal.

3.2　All products which passed by FengJie's witness pressure test will be stamped by FengJie on one of the flanges for identification.

3.3　Due to the fact that open and close operations wear the seating surfaces of the metal seated valves (especially gate valves); It might happen that when FengJie witness the seat test, the valves are approvable in accordance with related standards. However, when valves arrived in Principal's premise, the leaking rate is found to be over the tolerable leaking limit according to the same standards. This is inherent to the products and does not mean inspection is done improperly. FengJie is not liable for this situation. Neither will FengJie be responsible for degradation of products caused by transport or wrong handling after FengJie's Service.

3.4　In the event of FengJie being held liable in respect of any claim for loss, damage or expense of whatsoever nature and however arising, its liability to the Principal shall in no circumstances exceed three times the inspection fee for all those effected defective products or the sale price of the products by the Factory which ever being lower. The inspection fee for a unit products will be calculated based on the total time (in hours) needed to completely inspect the product, divided by 8 hours (one working day) and multiplied by one man day's service fee.

3.5　In addition, in case of the Service of pre-shipment inspection, where less than 100% of the production is complete, FengJie's responsibility will only extend to those items completed at the time of inspection; The Report does not evidence shipment.

3.6　The Principal shall guarantee and indemnify FengJie against all claims made by third parties for loss, damage or expense of whatsoever nature arising, relating to the performance or non-performance of any Service, to the extent that the total sum of such claims exceed the limitation of liability mentioned in Article 3.4 .

3.7　In the event of any claim, notice must be given to FengJie headquarters ( Shanghai Fengjie Valve Service Co., Ltd located at Room 315, No 433 Hami Road, Zip Code 200335 Shanghai, China Tel. (+86) –21-62397123 , Fax. (+86)-21-52180002 , within seven days following discovery of the facts ， or three months from the completion of the Service. Whichever is later. But in no case longer than 6 months.

3.8　FengJie shall be entitled to automatically either terminate and/or suspend provision of Services in the events that:

3.8a The Principal commits any material breach of its obligations under these terms and conditions.

3.8b The Principal is insolvent or unable to pay its debts, in suspension of payments.

3.9　FengJie, and its affiliates and the Principal undertake not to divulge to any third party confidential information obtained from the other party regarding the execution of FengJie Services.

3.10 Principal and FengJie both acknowledged that Inspection Service only serves to find out whether the products meet the inspection standards' requirements at the moment the products are being inspected. The manufacturers will at all time be fully responsible for the quality of the products.

3.11 The report will reflect findings of the Service at the time and place of Service. This Report does not discharge Sellers and Suppliers (manufacturers) from their legal and/or commercial obligations towards the Principal.

3.12 Fengjie will not be held responsible for eventual damages inflicted after the inspection of Fengjie.

4.0　Unless otherwise provided, these terms and conditions shall be governed by and construed in accordance with Chinese Law.

4.1　All un-resolvable disputes or differences of any kind whatsoever between the parties in connection to or arising out of the Services shall be submitted to the exclusive jurisdiction of the courts of Shanghai.